The federal lawsuit was filed by residents of the Richfield Concierge Apartments at 7620 Penn Avenue S. and claims low-income residents were forced to move after new owners bought the complex and decided to no longer participate in the Section 8 housing program, increase rent and limit unit occupancy.

According to court documents, the apartment complex was known as Crossroads at Penn Apartments until September 2015, when it was bought by MSP Crossroads Apartments, LLC, and renamed Concierge Apartments.

Before Crossroads was bought, it housed 2,230 residents, and rents ranged from $710-$760 per month. The lawsuit says the residents were generally lower income, and many were minorities or disabled. About 100 residents had a Group Residents Housing Program voucher to help those who are seniors or disabled, and about 35 other tenants had Section 8 vouchers, according to the lawsuit.

After being bought, the apartment complex underwent a “total transformation,” with new kitchen improvements in each unit, a fitness center, a yoga studio, an indoor golf simulator, a game room, a spa and a pet spa, according to court documents.

Jim Soderberg, the president of Soderberg Apartment Specialists, which is the managing company, is quoted in the judge’s ruling as telling a reporter that run-down apartments attract “undesirable residents” and that “good, responsible people” don’t want to live in them.

According to the lawsuit, the new rents range from $879-$949 per month; most of the units are one-bedroom.

The defendants said they are a private business and have a right to increase rents to reflect the market rates for comparable properties and the investment they were making in the building. They said the former owner hadn’t modernized the complex “for decades.”

All of the residents were notified Sept. 30, 2015, that their leases would terminate at the end of their current lease terms and that they could apply to stay but that the new rates and screening criteria could be “a challenge” for them.

The apartment complex said they would no longer accept Section 8 vouchers, and the new rent prevented those who received the GRH vouchers from living there. Residents were told they could continue using their Section 8 vouchers until May 31, but the rent increase would still take effect after their lease expired.

The new apartment owners also changed their occupancy rules to limit occupants to two people per bedroom. Before, the complex had an average of 3.2 people per bedroom, according to court documents.

The limitation required at least 834 people to relocate, according to court documents.

The residents who filed the lawsuit have claimed the apartment complex is violating the Fair Housing Act, which says it’s unlawful to discriminate in the provision of housing on the basis of race, color, religion, sex, familial status, national origin or handicap.

They claim the owners are not just remaking the building, but remaking the population as well to appeal to a “young, urban, professional population,” according to court documents.

The judge said the residents had enough facts to show their claims were not just conceivable, but were plausible. The judge said the apartment’s apparent target market along with Soderberg’s statement about “undesirable residents” shows that the impact might not be a coincidence.

The judge did, however, dismiss the residents’ claims that the apartment’s occupancy standard of two people per bedroom “causes a disparate impact based on familial status.”

We have calls in to Soderberg Apartment Specialists and Concierge Apartments for comments.